31 March 1995

Super-levy up again as green £ devalued

By Amanda Cheesley

OVER-quota milk producers suffered a further increase in the rate of super-levy this week, when the green £ was devalued again.

This 1.04% change was the last before the end of the milk year and sets the final super-levy at 30.45p/ litre. As such, the UK faces an estimated bill of up to £70m, although the exact figure will not be known until June, when direct sales returns have been fully assessed.

But the devaluation is good news for arable farmers, boosting intervention values another £1 to £114/t for April. If green rates remain unchanged until July 1 (which is extremely unlikely, with further devaluations a distinct possibility) area aid would rise to £265.60/ha (£107.48/acre) in England, £255.69/ha (£103.48/ acre) in Scotland non-LFA and £233.14/ha (£94.35/acre) in Wales non-LFA. Set-aside payments would also go up.

Meanwhile, Belgium has managed to temporarily escape a green currency revaluation, which would cut prices, even though the rules suggested its rates should change on Apr 15. Ministers meeting in Brussels this week decided to extend its so-called "observation period" to May 5, when Germany, Austria and Holland are also due to revalue. While this situation prevails, farmers in weak currency countries are likely to enjoy further price increases as devaluations are used to offset the differentials in strong currency countries.

A special meeting of ministers has also been arranged for Apr 10 to look at the options for compensating producers if revaluations do take place. Officials predict that, if Belgiums rates are adjusted, farmers should get another 2% increase in area aids in July. &#42